Shriram Group Founder R Thyagarajan Outlines Succession Plan
The Shriram Ownerhip Trust, the promoter entity, will now be governed by a four-member board.
Shriram Group founder R Thyagarajan has detailed the succession plan for the group, as he intends to step aside from a formal role within the organisation.
The promotership of the Shriram Group has already been transferred to Shriram Ownership Trust, which holds stake in Shriram Capital Ltd., which, in turn, is the holding company for other group businesses.
This promotership rests with the trust and not with an individual or family, said Thyagarajan at a press briefing. The management of this trust will now rest with a board of four people from within the group.
The board will include:
DV Ravi (managing director, Shriram Capital)
Jasmit Gujral (MD, Shriram General Insurance Co.)
Umesh Revankar (MD, Shriram Transport Finance Co.)
R Duruvasan (former MD, Shriram City Union Finance Ltd.)
There has been some anxiety expressed around succession planning at the Shriram Group, said Thyagarajan. This structure should lay those concerns to rest, he said.
Thyagarajan himself will no longer have a formal role in the organisation.
I will be available to them for consultations. I don't believe they need any more guidance. I won't be a trustee any more. I may give advice if I see something but they will be under no obligation to take my advice.R Thyagarajan, Founder, Shriram Group
The officials who will be moving to the managing board of the promoter company will continue in their individual roles.
The board, Thyagarajan said, will be a team of equals and there will be no chairman appointed for now.
A Complex Holding Structure
The Shriram Group, founded in 1974 by R Thyagarajan, has a complex holding structure.
Shriram Capital, a private entity, is the holding company for businesses ranging from financial services and insurance to asset management. This includes listed entities Shriram City Union Finance and Shriram Transport Finance. Shriram Capital holds about 25.56% in Shriram Transport Finance and 33.86% in Shriram City Union Finance, as per exchange data.
According to a Crisil note dated April 2021, shareholders in Shriram Capital include the Shriram Ownership Trust (29.7%), the Shriwell Trust (13.2%), the Sanlam group (26%), the Piramal Group (20%) and TPG (9.4%).
For some time now, the group has been attempting to simplify its corporate structure, which would allow investors to exit. The simplification would, however, involve working out appropriate swap ratios between different entities which has led to the process getting stretched out.
When asked about the ongoing restructuring exercise, Thyagarajan said that talks remain underway. "It will take concrete shape in the next few weeks or months."
Note: The story has been corrected to reflect the fact that the officials nominated to the managing board will continue in their existing roles for now.